Friendly Skies Of Free Market

September 5, 1985|By blue

Today's airline fares are enough to confuse anyone. Lately there have been about 300,000 fare changes per month -- enough for nostalgia about the good old days when Uncle Sam controlled fares and routes. But whatever the hassles of price gyrations and fine print, air travelers have been winners since Congress deregulated the skies in 1978.

Last year U.S. airlines carried 343 million passengers -- a 50 percent increase over 1978. A lot of that increase has been triggered by upstart airlines with lower fares.

In fact, battles for business are never-ending. People Express has just jumped into the Atlanta market, providing lower fares at that relatively high- priced hub. Several major carriers -- including United and American -- have just announced slight price increases. With the average plane filled nearer to capacity this year than last, it's likely that heavy competition kept the increases from being sharper.

Florida has been a clear winner from the free market. Of the more than 100 airports where airlines are getting a federal subsidy for flights that otherwise wouldn't happen, not one is in this state. That vouches for the strong market here.

For communities where the demand for flights is lower, the 1978 deregulation law softened the shock of competition with a 10-year program of federal subsidies.

Last year it cost $36 million to subsidize service to these airports where airlines can't make a buck -- most of them out West. Congress is likely this month to approve at least that much for next year even though President Reagan asked for zero.

But the administration was right on this. At a time of huge deficits and after seven years of cushioning, this cost is unjustified. Moreover, the notion of subsidizing airlines makes no more sense than subsidizing Greyhound or Trailways.

Moving air travel into the free market hasn't been a smooth flight. To survive, airlines have adapted; to profit, travelers have changed their habits. There's no reason to doubt the process so far -- or to delay making the market completely free by ending the safety net of subsidy. Airlines should compete freely.